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Economies of scale are a barrier to entry because:

New entrants do not know where they are positioned on their learning curve

New entrants do not know the economies they can generate in the future and therefore cannot precisely determine their selling price

New entrants face a risk of retaliation from the incumbents which could occur immediately on a large scale and start a price war as a deterrent of their entry

New entrants must either make a large scale entry and risk underutilized facilities, or face the cost disadvantage of entering on a smaller scale

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